How to Use Modifiers Correctly in Medical Billing

As a medical billing professional, you use modifiers to alter the description of a service or supply that has been provided. You can use modifiers in circumstances such as the following:

  • The service or procedure has both a professional and technical component. An example would be radiological procedures: One provider (the facility) owns the equipment and bears the cost of maintenance and other things, but the physician must interpret the findings of the radiological procedure.

  • The service or procedure was performed by more than one physician and/or in more than one location. For a complex procedure that requires more than two hands, an assistant surgeon may be used.

  • The service or procedure has been increased or reduced. For example, a procedure that normally takes an hour requires two hours because of scar tissue, or the description of a procedure notes that another procedure is included but that other procedure wasn’t necessary and therefore wasn’t performed.

  • Only part of a service was performed. A procedure that is bilateral by definition (that is, it is performed on both sides) is performed only on one side.

  • The service or procedure was provided more than once. An example would be excising lesions on different areas of one body part through separate incisions.

  • Events occurred that were unusual to the circumstances. For example, the patient had an adverse reaction to anesthesia which resulted in early termination.

Payer organizations revise modifiers annually, some being added and others deleted, and each payer can determine how the modifiers must be used for its’ own organization. For example, Medicare discontinued the SG modifier, which it once used to indicate that a claim was for a facility, but various Medicaid and Workers’ Compensation payers still require it. Therefore, you must keep abreast of individual payer preferences with regard to required modifiers.

While some payers require modifiers, others don’t care whether modifiers are applied because their contracts pay based on the revenue codes or the procedure codes. Using a modifier for these claims usually doesn’t affect payment. What affects payment is failing to apply modifiers that are required by the individual payers.

Because commercial payer policies differ, make sure you have access to their contracts so that you can code the claims correctly with the required modifiers. You’re also responsible for remaining current with regard to modifiers your employer uses. You can find modifiers in the CPT book, on the CMS website, and on Medicare contractor websites.

Other government payers such as the Department of Labor, Medicaid and TRICOR have specific modifier requirements for various classifications of providers and procedures.

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